The Administration Implemented CREATE MORE Act for Enterprises to Boost Economic Growth and Revitalization
The Administration has enacted the Republic Act (R.A.) No. 12066 or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities and Strengthen the Economy (CREATE MORE) Act on November 11, 2024.
The law was enacted to clarify ambiguities, broaden VAT and duty incentives, streamline and reduce business costs, enhance tax incentive competitiveness, adapt to global developments, and set clear transition rules for Registered Business Enterprises (RBEs).
The highlights of the Act include the following:
- Liberalizes qualification of goods and services for VAT and duty incentives by shifting from “directly and exclusively used” to “directly attributable” and explicitly including items in BIR’s negative list (BIR RR No. 3-2023)
- Extends VAT-exemption on importation and VAT-zero rating on local purchases
- Allows High-Value Domestic Market Enterprises, with investment capital exceeding Php 15B and are import-substituting, or with annual export sales of at least USD 100M, to avail of VAT incentives
- Extends the period of availment of VAT and duty incentives to the entire registration period as an RBEs
- Simplifies and increases transparency in the VAT & Excise Tax Refund Process
- Introduces the Registered Business Enterprise Local Tax (RBELT) of not more than 2% of gross income, which is in lieu of all local taxes, fees and charges, for RBEs under the Income Tax Holiday and Enhanced Deduction Regime
- Exempts RBEs under the 5% Special Corporate Income Tax (SCIT) Rate from all national and local taxes, local fees and charges
- Reduces Corporate Income Tax (CIT) rate from 25% to 20% for RBEs under the Enhanced Deduction Regime
- Expands tax deductions to support tourism and energy-intensive sectors by increasing additional deduction on power expense from 50% to 100% and allowing additional 50% deduction for tourism reinvestment and trade missions expense
- Provides flexibility and option for RBEs to forego the ITH incentive and directly avail of SCIT or EDR at the start of commercial operations
- Provides longer incentive periods for qualified RBEs from a maximum of 17 years to a maximum of 27 years
